Simple Tips To Help You Save On Taxes At Work

If you want to reduce the amount of tax you pay, you should let your employer cover some of your expenses.

By simply allowing your employer to cover your expenses with pre-tax dollars, you will be able to save hundreds and sometimes even thousands of dollars annually.

The best way to save on taxes.

Make arrangements with your employer to pay for some of your expenses every month. Ask you employer to pay for an expense straight up. Any employer will do this because, a) Its a wonderful thing to do, and b) The expense will be a deductible expense which can be deducted when calculating taxes.
Case  Study
Pretax Expenses

Assuming your income tax bracket is 25 percent and you pay a monthly rail pass of 100 dollars out of your after tax dollars. This means that your income was 133.33 dollars but 33.33 dollars was deducted as taxes before you could put your hands on it and the remaining 100 dollars is what you withdrew from the bank account for your monthly rail pass.

If you asked your employer to pay for your monthly rail pass using pretax dollars, only 100 dollars of your income will be used. This means that you will save 33.33 dollars every month or 400 dollars annually.

All you have to do to save on taxes is to identify expenses that your employer can pay for you using pretax dollars and contact human resources to see how the company can help you.

Don’t Waste Your Tax Refund: Make it Work for You

If you are one of the several million Americans who is anticipating a sizable tax return refund this year, then you know how very exciting the prospect can be. There are just so many things you can do with that lump sum of cash, right? However, the truth is that most people have great intentions for how they will make use of their tax refunds, only to put it into the checking account and watch it dwindle away on trivialities. The only way you can avoid this situation is to put some careful consideration into how to best reap the rewards of paying your taxes all year. Don’t waste your tax refund. Instead, make it work for you. Here are some ideas for how:

Retirement savings plan. Tax refund time is the perfect time to set up your 401K. Make an appointment with a financial adviser to size up your options (or take advantage of your employer’s 401K program, especially if your employer offers company matching). Contribute as much as the program of choice will allow for, or the total amount of your refund – whichever is greater.

Investments. Have you always been interested in learning how to grow your money through investment instruments? Well, now is the time to do it. Again, this is where a good financial adviser comes in. Weigh out all of your options carefully, and if you have enough money to break into more than one investment, experiment diversifying with some high-risk and some low-risk investment vehicles.

Getting out of debt. Is your mounting credit card debt beginning to eat up the money you could be putting toward saving and investing for your future? Then before you even consider using your tax refund for anything else, pay off that debt! Think of it this way: all of those fees and interest payments will compound the amount of money you owe over the long run – and that equates to more debt than any interest you’d make on an investment.

Your goals. Is there something you’ve been wanting to do for a long time that you just haven’t had the funding for? Perhaps it’s a small business venture, or even a European excursion. Consider your goals and dreams in life, and then consider how much they might cost you. It could be that tax refund time is the perfect time to have the experience of a lifetime.

As you can see, your tax refund can be a great opportunity to get ahead in a number of different ways. Consider these smart choices when you get that long awaited check in the mail, and make this year’s tax refund really count.

About the Author: Jamey Vazguez applies her tax refund to her investment goals and retirement plans every year. She usually keeps about $100 and applies it to some of the best Los Angeles deals she can find, to treat her family, but the rests is invested in her future.

Unusual Tax Deductions You Should Not Claim

More and more people are filing their tax returns with turbo tax and other software so they can try tricking the system. I have never been a person to take a chance as far as tax deductions are concerned. However, some people will gladly take the risk boldly going where most of us would only dare.

The Minnesota Society of Certified Accountants has compiled a list of odd tax deductions according to a survey given to its members. Of course, these were thwarted by their accountants.

Chairwoman Sara Portner says there is a high profitability they would get sent an angry letter from the IRS if a professional had not interfered. If they use turbo tax, the software can not distinguish unusual tax deductions.

Children may get on your nerves but that is off-set by the tax deduction you can claim each year. The deduction can not be claimed for the year unless they are actually born. One woman thought she could claim an unborn baby during the times she was expecting although she put the child up for adoption. Another client thought he should be able to claim a city official because they the salaries.

Someone tried to claim a former spouse.You cannot claim a spouse even if they are not working. According to turbo tax, you may get an exemption that is equal to the you would get for a dependent. Do not try to increase charitable donations. One person believed you could use donated blood as a deduction. Keep in mind you may get audited by the IRS if they are suspicious of your tax deductions.

Capital Gains Ignorance Leads To Catastrophic Losses

The IRS regards almost every asset you use or own for business or personal reasons as a capital asset. Such items include your personal residence in addition to any furniture or stocks and bonds held in your own name. Net profit or loss from the sale of such commodities is either a capital gain or loss.

All capital gains must be accurately and fully reported on federal tax returns.

Deductible capital losses are limited to investment property.

Capital gains and losses may be categorized as either “short-term” or “long-term.”

Applicable net capital gain taxes are typically lower than other taxable income rates. Maximum 2001 tax year tax rates for most individuals is 15%. Low-income individuals’ tax liability may be as low as 0 % on all or part of net gain. Special capital gains categories may attract tax liabilities of 25 to 28 percent.

Capital losses which exceed capital gains are deductible to offset other income such as salaries or wages. Annual deductible amounts are limited to $1,500 and $3,000, depending on your filing status.

If net capital losses exceed the allowable annual deductible amounts, you may rollover part of the unclaimed sum by deducting it on the next year’s tax return. The IRS will then regard it as though it was actually incurred during that tax year.

Form 8949 – Sales and Other Capital Asset Dispositions will be required to compute capital losses and gains. Taxpayers must list all details of capital asset disposition on this form and transfer the net figure to Form 1040 Schedule D.

Santorum Taxes And Tax Plan, A New Road Or Another Detour

Rich Santorum won the Iowa caucuses and has positioned himself as a front-runner. One candidate surges ahead and then dramatically drops down in the polls. The American voter appears uncertain when it comes to choosing a candidate for the GOP nomination. The Santorum 2012 taxes and overall tax plan require closer attention. The United States deficit and rising unemployment continue to be the hot topics in this race.

The Santorum tax plan it is estimated would cut taxes by one-trillion by 2015. A higher the deficit the will lower the value of the American dollar. He promises to cut taxes for individuals making forty-thousand or more a year. His plan would increase the overall spending power of the average American, by increasing their incomes by lowering their tax rates. His plan would create two tax brackets of ten percent and twenty percent. He would lower capital gains taxes to twelve percent from fifteen percent and increase the child exemption for individuals threefold. The biggest tax breaks would go to corporations that would pay around seventeen and a half percent, which is half of what they currently pay. Companies based in the United State would not be required to pay any taxes. This tax measure allegedly would encourage companies to invest in home based industries.

Santorum’s tax plan is designed to increase the nation’s economic growth, but it is based on systems that have not reduced the deficit or increased employment. Giving Companies substantial tax cuts and incentives has not reduced the deficit, or created more jobs. The nation deserves a better tax plan.